Question

Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021: Aug.1 Inventory on hand-2,000 units; cost $5.30 each. 8 Purchased 8,000 units for $5.50 each. 14 Sold 6,000 units for $12.00 each. 18 Purchased 6,000 units for $5.60 each. 25 Sold 7,000 units for $11.00 each. 28 Purchased 4,000 units for $5.80 each. 31 Inventory on hand-7,000 units.

Answer 1

Total unis sold=6000+7000=13000 units
Under FIFO method,Goods purchased first are sold first.
Periodic FIFO				Cost of goods available for sale			Cost of goods sold-Periodic FIFO			Ending inventory-Periodic FIFO
				# of units	Cost per unit	Cost of goods available for sale	# of units sold	Cost per unit	Cost of goods sold	# of units in ending inventory	Cost per unit	Ending inventory
Beginning inventory				2000	5.3	10600	2000	5.3	10600
Purchases:
Aug 8.				8000	5.5	44000	8000	5.5	44000
Aug 18.				6000	5.6	33600	3000	5.6	16800	3000	5.6	16800
							(13000-2000-8000)			(6000-3000)
Aug 28.				4000	5.8	23200				4000	5.8	23200
Total				20000		111400	13000		71400	7000		40000
Inventory balance=$ 40000
Cost of goods sold=$ 71400
Under LIFO method,Goods purchased last are sold first.
Periodic LIFO				Cost of goods available for sale			Cost of goods sold-Periodic LIFO			Ending inventory-Periodic LIFO
				# of units	Cost per unit	Cost of goods available for sale	# of units sold	Cost per unit	Cost of goods sold	# of units in ending inventory	Cost per unit	Ending inventory
Beginning inventory				2000	5.3	10600				2000	5.3	10600
Purchases:
Aug 8.				8000	5.5	44000	3000	5.5	16500	5000	5.5	27500
							(13000-4000-6000)			(8000-3000)
Aug 18.				6000	5.6	33600	6000	5.6	33600	(390-380)
Aug 28.				4000	5.8	23200	4000	5.8	23200
Total				20000		111400	13000		73300	7000		38100
Inventory balance=$ 38100
Cost of goods sold=$ 73300
Under average cost method,Inventory and cost of goods sold valued at average cost per unit
Average cost per unit=Total cost of goods available for sale/Total units available for sale=111400/20000=$ 5.57 per unit
Average cost				Cost of goods available for sale			Cost of goods sold-Average cost			Ending inventory-Average cost
				# of units	Cost per unit	Cost of goods available for sale	# of units sold	Cost per unit	Cost of goods sold	# of units in ending inventory	Cost per unit	Ending inventory
Beginning inventory				2000	5.3	10600
Purchases:
Aug 8.				8000	5.5	44000	13000	5.57	72410	7000	5.57	38990
Aug 18.				6000	5.6	33600
Aug 28.				4000	5.8	23200
Total				20000		111400	13000		72410	7000		38990
Inventory balance=$ 38990
Cost of goods sold=$ 72410